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Tue January 3, 2012
New Rules Mean Full Disclosure For Airfares
New rules will soon compel airlines and travel sites to disclose the total price of an airline ticket up front. But some airlines say the rules aren't fair and they're going to court to try to stop them.
Right now, some airlines and travel sites lure in customers with very low fares — and a tiny asterisk. Government taxes and fees — and perhaps a fuel surcharge — can be found in the fine print or on another screen.
Kate Hanni of FlyersRights.org says lots of travelers complained. "People would get up against the point where they were about to make a purchase and suddenly the cost of their ticket went up because of these taxes and charges," Hanni says.
And comparing prices wasn't easy.
Take a currently advertised $79 fare between Los Angeles and Seattle. Taxes and fees bring the ticket to about $90.
"International fares certainly, is where we see the biggest hit," says Joe Megabow, vice president of the online travel agency Expedia.
He says charges on international flights can total hundreds of dollars—sometimes more than the ticket itself
And, like the federal government, Megabow believes all the charges should be disclosed up front.
"We think consumers should have the right to know what they're paying for their airfare," says Bob Rivkin, general counsel at the Department of Transportation. "They need to have an effective means of comparing alternative methods of travel, and that's what we are trying to provide," he says.
A new rule which goes into effect later this month will require airlines and others to include government taxes and fees — along with any mandatory charges — in their advertised fares.
Steve Lott, a spokesman for Airlines for America, the industry's largest trade group, says the airlines will comply, but they aren't very happy. "The odd thing is this type of regulation does not apply to any other industry," he says.
He points out that rental car companies don't have to disclose taxes and fees in their ads, nor do retailers who sell TVs.
Moreover, the airlines say the rule violates their right to free speech, and Southwest and a couple of smaller carriers have filed suit in federal court contesting the rules.
Other rules slated to go into effect later this month include one that will allow passengers to cancel a reservation within 24 hours with no penalty — so long as the reservation is made at least a week before the flight. Others require additional disclosures concerning baggage fees, compel more timely notification when flights are delayed or canceled, and prohibit price increases after the tickets are purchased.
Hanni, the passenger advocate, says that last September, hundreds of travelers bought what they thought were low introductory fare tickets on Korean Airlines. "And then two months later, Korean Air sent a letter to every single passenger that purchased those tickets and said we are going be cancelling your tickets unless you want to pay us this amount more."
Under the new rules the government could fine an airline for such actions and compel it to honor the original price.
What else can consumers expect in the coming year?
Expedia's Megabow says passengers are likely to experience more of what they didn't like about air travel last year.
"You were paying more money, getting more of those middle seats, crazy check-ins and check-outs as you are getting on to those very full planes, so it was not, overall, a great year for flying," he says. "We haven't seen anything to indicate it's going to be a whole lot different in 2012 but we will see."